Wrote this to a family friend’s kid who is interested in finance, but through the lens as if I was writing it to my younger self. My background (and his) is far removed from NYC, as such the route to finance is made a bit more difficult. My hope is the advice below incrementally makes it easier for him and others.
My email to you is composed of three aspects: (I) philosophical in that I hope the advice is timeless, (ii) books that I have read informing how I think and (iii) mechanical in that it elaborates on specific career paths and trajectories as I know today and gives more concrete advice.
For (i), a core belief of mine is that we live in a chaotic (mathematical definition)/probabilistic and not deterministic world. As such, luck is and always will be a factor in any outcome (my current modicum of success included). What one does have control over is increasing the odds in their favor. A tangible example is going to [target school] vs [school I went to] increases your chances of getting into finance (investment banking) but does not guarantee it. Accordingly, when making a decision one should think along a scale of 0-100% (with neither absolute attainable) and think through does this decision, relative to other options, implicitly increase my odds of what I want to attain and if you don’t know what you want to attain does it maintain the maximum probabilities around a range of outcomes.
Another aspect of a chaotic world is the opacity around the links between what outcomes could have occurred and what actually occurred. To elaborate, I followed xyz path making decisions that ultimately led me to where I am today. While I like to think the decisions I made increased my chances of success it is impossible to know. Said differently, what if 100 me’s made all of the same decisions and only 1 achieved what I have achieved. It follows that I got lucky and my process isn’t replicable. Of course, we can never know, but in thinking that way it makes you question your own success and others: did this person get lucky (1/100) or was his process sound and success was highly likely. To examine that, look at one’s decisions/process more so than the outcome. You’d never take advice from a lottery winner on how to attain wealth. Similarly, you shouldn’t take advice from someone who is successful, and when you examine how they became successful, you realize it was more luck than skill.
For (ii), cognitively, humans are wired in such a way that thinking probabilistically is difficult. We strive for meaning and believe every decision and action was meant to be and that outcomes are the direct result of our inputs with luck being a passive observer that rarely acts. As such, a lot of my early reading was done on how to overcome these biases and are mostly psychology books (broadly defined). I will provide you with a list of five meaningful books and a few fun reads that or more entertaining but give a sense for a couple high performing cultures (finance and tech)
- Books by Dan Ariely are easy, intuitive and provide a good introduction to cognitive biases
- Blackswan by Taleb is a solid intro to a lot of what I discussed
- Thinking fast and slow is a dense book (took me 6 months to read) but is a seminal book on psychology/behavioral economics.
- Behave, is also quite dense but very good. I would read concurrently with thinking fast and slow.
- Sapiens by Yuval is an interesting read
- Liars Poker
- Monkey Business
- Chaos monkies
Good websites: www.Wallstreetoasis.com; https://www.mergersandinquisitions.com/
For (iii), there are many career options that you can pursue within the vague realm of “business”. By no means exhaustive, a few paths that come to mind are accounting, finance, sales, marketing, HR, legal/compliance. Within these fields, I would break it into two aspects: doers and advisors. Generally speaking, the median advisor makes more than the doer, but the highest paid doers make more than the highest paid advisors. Early in your career, I would recommend the “advisor” realm as it provides a great training ground
|Field||Doers||Advisors||1st year comp for advisors (rough estimates)|
|Accounting||CFOs, controllers, AP/AR clerks||Big 4 accounting – audits / tax etc||60-80k|
|Finance||CFOs, Business Development, FP&A||Investment banking||120-160k|
|Sales/marketing||Sales managers||Consultants (not that applicable/ really a seperate category)||80-100k|
I would try and get an understanding of these roles and think through what you would like to do ultimately. To get into finance or Big 3 consulting it is much easier if you come from a “target” school opposed to a less renown school. If accounting seems more appealing then this is much less relevant. If you are unsure then probably best to keep your options open by going to the best possible school.
For your reference, my path was cold calling and cold emailing into investment banking then private equity. To get into investment banking I was rejected well over 20 times, with numerous calls and emails never responded to. To get into private equity I was rejected a dozen times. I failed in trying to get into a hedge fund. Don’t be afraid of being rejected and always work on improving your odds of success.